EF too big

[cypher1]

Haven't heard of one, my credit union doesn't do that, you might want to think about switching banks.

I was just going to say at the Postal Credit Union I used to have a 2nd separate savings account. If I didn't keep a minimum of $200 for balance, they'd take out per month $2 or so for fees. That was 5 years ago, and I ended up just closing it.

[BuckyBadger]

Actually my method isn't risky, others have their EF's in mutual funds or other investment strategies.

Actually, it seems that the majority of people are not talking about keeping EF $ in "investment strategies." What they are saying is that they have other savings in the account with the EF $, such as car and vacation savings, and that if by having a higher balance in a savings account you get a higher interest rate, there's no problem in that.

As far as I can tell, no one was talking about putting their EF in mutual funds, they just disagreed that there had to be a completely different account with no more and no less than your EF $. They believe that money can be put together as long as you are aware of what you have earmarked for what purposes.

[jpg7n16]

Haven't heard of one, my credit union doesn't do that, you might want to think about switching banks.

They're called 'account maintenance fees' - I'm sure you've heard of them. My bank changed the requirements to avoid a service charge, that you needed a minimum balance in each account or needed a direct deposit.

Dividing out my EF over 5 accounts wouldn't let me have enough in each account, and I'd get a $5/month charge per account that didn't meet the balance requirement. If I only had 1 or 2 accounts, there's no fee cause I can meet the balance requirements. Essentially - a fee for having too many accounts. Or forcing me to keep too much in cash. Pick your poison.


Why switch banks? Go through a huge hassle (new checks, change direct deposit, change account information on fidelity, move over my automatic payments, redo my student loan autopayments, etc.) just so I can set up a bunch of accounts that I don't need?

No thanks.

[littleroc02us]

I am not sure where the risk is coming into play here. I can put all my cash in a FDIC insured account with the highest interest rate. I am not following why this is risky.

Actually, since we don't finance anything, we do have a large savings fund. Cars, home maintenance, etc., etc. We need cash for these things. I also like several months of expenses on hand in case of job loss or other emergency.

Actually my method isn't risky, others have their EF's in mutual funds or other investment strategies.

[littleroc02us]

Some banks have instituted a monthly fee for having too many accounts without direct deposit. So separating accounts would be detrimental, as the fees would cost more than earnings.

I personally have 1 checking account. I don't separate out anything.

Haven't heard of one, my credit union doesn't do that, you might want to think about switching banks.

[Little House]

You might want to keep 6-8 months of living expenses in your current EF fund, then take the remaining portion and invest it in a mutual fund. I love Maxfunds[dot]com to compare risk and return on mutual funds. It also tells you if it is a high-fee fund or low-fee fund (you want to go with a lower fee fund.) I know some people like ETF's, but I don't know much about them myself.

[GREENBACK]

As always, I suppose I am in the middle.

I somewhat compartmentalize my savings. But, I also prefer to be efficient (i.e. have one high-interest savings account for all cash). Maybe being an accountant helps. I don't see why where the money is has anything to do with how I compartmentalize it. That's probably accountant-brain.

Probably is, and I don't have an "accountant brain". My compulsions with money can occasionally be all over the place(nothing crazy, though). I used to have multiple accounts but found that I was psyching myself out over tiny gains. I just found it easier to have a few and manage it from there.

[cypher1]

I always looked at my CU checking account as main one for paying bills. Saving account tied to it for overdraft peace of mind/access to small cash needed within 24hrs. While ING=EF+car stuff. Of course this not including retirement, HSA, FSA accounts, etc.

[MonkeyMama]

Tough to do much to stay on track with inflation now. Interest rates are very flat and inflation is uncertain right now. I think this all sounds a bit like a right brain/left brain argument. Left brainers(me) tend towards keeping the figures in their head as far as where all the savings are going and right brainers tend to compartmentalize all their savings(very unprofessional opinion).

As always, I suppose I am in the middle.

I somewhat compartmentalize my savings. But, I also prefer to be efficient (i.e. have one high-interest savings account for all cash). Maybe being an accountant helps. I don't see why where the money is has anything to do with how I compartmentalize it. That's probably accountant-brain.

[MonkeyMama]

My EF fund isn't for the purpose of making an investment off of it, it's there for emergencies only. I don't care if it makes any money, an ING account making 1.1% won't make me rich. My savings are for large purchases and it comes and goes based on purchases. All of our money is tied up in our house and investments, we don't keep a large savings account sitting around because what would we do with it?

I am not sure where the risk is coming into play here. I can put all my cash in a FDIC insured account with the highest interest rate. I am not following why this is risky.

Actually, since we don't finance anything, we do have a large savings fund. Cars, home maintenance, etc., etc. We need cash for these things. I also like several months of expenses on hand in case of job loss or other emergency.

[GREENBACK]

Tough to do much to stay on track with inflation now. Interest rates are very flat and inflation is uncertain right now. I think this all sounds a bit like a right brain/left brain argument. Left brainers(me) tend towards keeping the figures in their head as far as where all the savings are going and right brainers tend to compartmentalize all their savings(very unprofessional opinion).

My EF is also in an ING account and exceeds what I would need for a true EF. I know what I anticipate needing short term and long term. It's pretty difficult to speculate on how much you'll actually need for a short term minor emergency or a long term major emergency. Emergencies don't usually come with an itemized breakdown of expenses.

I do like the idea of having a little more liquidity than I anticipate needing. But that's an individual thing. I also keep a bit of cold hard cash around as part of my emergency plan. Most who have had major emergencies will never say they saved too much for it or had too much money laying around.

I'm more than willing to change my view of things if interest rates and inflation change significantly.

[jpg7n16]

So, you keep an ING fund that includes an EF fund, a car fund and hobby account? I can see why it would grow, IMO seperate them.

Some banks have instituted a monthly fee for having too many accounts without direct deposit. So separating accounts would be detrimental, as the fees would cost more than earnings.

I personally have 1 checking account. I don't separate out anything.

[littleroc02us]

But if it could do both, wouldn't that be even better?

Yes, if it didn't involve risk. EF's aren't meant to be risked, that would be like an Oxymoron!

[fruitbowlk]

Are you debt free? If not you can place some cash towards that. If you haven't started a ROth IRA you can contribute to one.

[BuckyBadger]

My EF fund isn't for the purpose of making an investment off of it, it's there for emergencies only.

But if it could do both, wouldn't that be even better?